State Street Global Advisors (SSgA) has unveiled a new short-maturity sterling corporate bond exchange-traded fund (ETF) on the Deutsche Börse (Xetra).
The SPDR Barclays 0-5 Year Sterling Corporate Bond UCITS ETF, which will track the Barclays 0-5 Year Sterling Corporate Bond Index, will allow investors to participate in the performance of fixed income corporate bonds with a maturity of up to five years.
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The new ETF has a total expense ratio (TER) of 0.20%.
SSGA said that the short maturity ETFs can be used to both over or underweight specific regions and currencies and create more bespoke exposures across the yield curve.
Also, the short maturity corporate indices tracked by SPDR ETFs will hold all bonds until maturity, which lowers duration and portfolio turnover while maintaining diversification.
Eleanor Hope-Bell, head of SPDR UK at SSgA, said: "In the current environment, with speculation growing that the interest rates cycle is turning, short-maturity ETFs should be a useful tactical tool, allowing investors to earn yield while remaining flexible."
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By GlobalData"The SPDR range offers our investors diversified, liquid access to the short end of the government, investment grade and high yield corporate yield curves in one simple trade and allows for flexible cost-efficient ways to adjust duration within a portfolio, by replacing or blending with standard all-maturity exposures," She added.
